Fintech and Foreign Banks Growing Fast in Vietnam

Vietnam currently lags behind other Southeast Asian countries when it comes
to financial inclusion. Can foreign players and fintech solutions fill the
gap ?

n Vietnam financial technology is increasing bank penetration, promoting
financial services and offering the large unbanked population access to payment
solutions. With a population of almost 93 million and a surging middle class,
foreign banks are also keen to penetrate the market.

Asia-Pacific focused consulting firm Solidiance, in its recently published
report, «Unlocking Vietnam's Fintech Growth Potential», credits the growth of
financial services in the country to several factors.

Quickly Adapting

Among the main drivers are high rates of internet and smartphone
penetration, the increasing adoption of e-wallets and a fast-growing liking for
e-commerce. All of which are underpinned by swiftly rising salaries and a
burgeoning consumer sector.

More traditional banking services are growing in the country too with banks
from more mature North Asian markets deepening their penetration. Korean
institutions have been particularly aggressive in developing onshore business
in Vietnam.

Technology Leap

Shinhan Bank, which acquired ANZ Bank Vietnam's retail division in April
2017 as finews.asia reported, opened four more branches recently, bulking up
its network to 30 branches. Fellow Korean lender Woori Bank will also open six
more branches this year.

With a limited population and an over-banked domestic market, Singaporean
banks see Vietnam as a new banking hinterland. Singapore's United Overseas Bank
received its in-principle foreign-owned subsidiary bank licence in Vietnam in
2017.

The foreign banks entering Vietnam bring with them advanced systems and
growing expertise in financial technology. They are also exporting their softer
skills in training and advising on the development of regulatory
infrastructure.